Secret Service Raids Ad Surf Daily

[wserra]

The Secret Service yesterday raided the offices of the MLM Ad Surf Daily in Quincy, FL. Details are in the story in the Tallahassee Democrat. The D.C. U.S. Attorney filed a civil forfeiture action against the owner of the scam, Thomas Bowdoin, for the property and $53 million the Secret Service located. In the process, the government calls it a "massive Internet-based wire fraud scheme", a pyramid with no discernable product other than a non-existent "opportunity".

Law enforcement strikes such as this one and the CA AG suit against YTB ("YourTravelBiz") about which Doc Bunkum has posted are all well and good. However, there are hundreds of these ripoffs, and the odds of law enforcement actually shutting down any one pyramid are not good. Scammers will just keep fleecing the gullible until there is some coordinated action. The FTC would be the logical agency to do that, but it's led by Bushies who didn't even have the desire to adopt the bizopp rules which would have done no more than require disclosure. It wouldn't take much effort. God knows that these scammers are not looking to litigate. Hell, they know they won't be in business more than long enough to grab the low-hanging fruit and move on.

So: thank you, CA AG and Secret Service. You've just nailed 1% of the outstanding scams. Better that, I suppose, than nothing.

[Judge Roy Bean]

....The FTC would be the logical agency to do that, but it's led by Bushies who didn't even have the desire to adopt the bizopp rules which would have done no more than require disclosure. It wouldn't take much effort. ....

The FTC is lmost entirely reactive based on the numbers of reported complaints and the occasional formal letter prod from some House or Senate chair.

[RyanMcC]

I actually make part of my living selling autosurf and manual traffic exchanges (and banner exchanges), and host hundreds of them. The ones I sell aren't "paid autosurf" programs though, people simply signup, view websites and receive credits which they can use to recieve visitors to their website.

I've noticed alot of "paid autosurf" sites for years, and even had many of my customers request a similar feature so they could offer payments too. I always refused that request as I couldn't figure out how those sites could legitimately offer payments in the way they did.

One of my customers had her paypal account locked earlier in the year, aparantly these "paid autosurf sites" which almost always collapse are giving every "traffic exchange" program a bad name, and paypal doesn't allow any autosurf traffic exchanges to accept payments through them anymore.

I'm shocked he was able to generate so much money from such a website, even from a scam.

--

Here is a link to the complaint against Bowdoin:
http://www.tallahassee.com/assets/pdf/CD11468785.PDF

[Doc Bunkum]

Interesting assessment of the situation on the ASD home page:

Friday, August 1st 2008 afternoon update:

Upon direction from the U.S. Attorney's Office in the District of Columbia, ASD will not be able to move funds into company accounts, or out of them. We will work to resolve this problem, and return to normal operation, as soon as we are permitted to do so.

ASD Management.


If you're up to it, you can read the entire 101 page complaint against ASD in PDF format on this link: http://www.tallahassee.com/assets/pdf/CD11468785.PDF

Interesting, too, is the story in the Tallahassee Democrat - "Florida attorney general files lawsuit against Quincy-based company" - and the comments by readers.

[wserra]

And now the Florida Attorney General has filed its own lawsuit. See the press release and the complaint.

Y'know, guys, there really are plenty of scams out there worth investigating. Hell, you don't even have to investigate in order to find them - lots are discussed here, for example. You really don't have to jump on each others' bandwagons just to avoid being left from the headlines.

[wserra]

The FTC is lmost entirely reactive based on the numbers of reported complaints and the occasional formal letter prod from some House or Senate chair.

From the FTC site:

The Federal Trade Commission is the nation's consumer protection agency. The FTC's Bureau of Consumer Protection works For The Consumer to prevent fraud, deception, and unfair business practices in the marketplace. The Bureau:

Enhances consumer confidence by enforcing federal laws that protect consumers
Empowers consumers with free information to help them exercise their rights and spot and avoid fraud and deception
Wants to hear from consumers who want to get information or file a complaint about fraud or identity theft

Y'mean, JRB, that in reality the FTC only reacts to the third in the above list, and then only slowly and grudgingly?

I'm shocked, I tell you. Shocked.

[Judge Roy Bean]

....

Y'mean, JRB, that in reality the FTC only reacts to the third in the above list, and then only slowly and grudgingly?

I'm shocked, I tell you. Shocked.

My personal favorites:
http://loansharks.blogspot.com/2005/06/ ... ghing.html
http://loansharks.blogspot.com/2005/07/ ... other.html
http://loansharks.blogspot.com/2005/08/ ... -once.html

[Doc Bunkum]

I doubt a silly little lawsuit from the Florida AG's office will do much to deter other crooks from setting up a similar scam - especially when they read the part about $53 million being seized from Thomas Bowdoin Jr.

The 101 page complaint filed against ASD is a veritable "how to" manual for anyone wondering how to run the business.

[RyanMcC]

I doubt a silly little lawsuit from the Florida AG's office will do much to deter other crooks from setting up a similar scam - especially when they read the part about $53 million being seized from Thomas Bowdoin Jr.

The 101 page complaint filed against ASD is a veritable "how to" manual for anyone wondering how to run the business.

Too late, here's a list of hundreds of them.

[michaelwebsterlaw]

This is the first time I have ever seen the Secret Service care about a Ponzi scheme. And the first time I have seen this particular cause of action against property.

Very interesting, I suspect that the Secret Service is just a little worried that these schemes are very effective money laundering devices: little groups put in money in far away lands, and magically one person gets nice green money in America.

[saber6]

It sure is interesting to see all the "experts" come crawling out of the woodwork when the Government steps in and shuts down a company because there have been complaints. Echos of "Ponzi", 'scam", "pyramid" bounce around the room like a ball in a game of Jai Alai and like Jai Alai, almost nobody has a clue what they are talking about if they try to describe the game! How many ongoing complaints are there in the courts involving GM, Ford, Drug Companies, Countrywide, Merrill Lynch, Apple, Microsoft - gee, I don't see the masses rising up over these?

Just what is a Ponzi scheme? What makes a program into a Pyramid? Scam is too broad a term to qualify here, but almost everyone shooting off their brains here have less than, what I will call, a working knowledge of the other two and all you do is make yourselves look like idiots.

Apart from this, what happened to the old principal of Justice and innocent until proven guilty? You all have ANDY Bowdoin drawn, quartered and sold for dog meat even before the ink is dry on the documents. I remember well when the same ignorant vitriolic verbiage was used when the US Government tried to keep Franchising from developing - not because there was anything illegal about it, but simply because big business did not want to accept the challenge that this new concept presented! Seems to me that a lot of the same could be going on here.

How many of you are going to end up with sticky egg all over your faces if the courts find that the same thing has occurred here?

Last time that I looked, none of you was sitting on the Judge's right side whispering into an ear on what decision that he/she must render.

Get a life

[Mr. Mephistopheles]

It sure is interesting to see all the "experts" come crawling out of the woodwork when the Government steps in and shuts down a company because there have been complaints. Echos of "Ponzi", 'scam", "pyramid" bounce around the room like a ball in a game of Jai Alai and like Jai Alai, almost nobody has a clue what they are talking about if they try to describe the game! How many ongoing complaints are there in the courts involving GM, Ford, Drug Companies, Countrywide, Merrill Lynch, Apple, Microsoft - gee, I don't see the masses rising up over these?

Just what is a Ponzi scheme? What makes a program into a Pyramid? Scam is too broad a term to qualify here, but almost everyone shooting off their brains here have less than, what I will call, a working knowledge of the other two and all you do is make yourselves look like idiots.

Apart from this, what happened to the old principal of Justice and innocent until proven guilty? You all have ANDY Bowdoin drawn, quartered and sold for dog meat even before the ink is dry on the documents. I remember well when the same ignorant vitriolic verbiage was used when the US Government tried to keep Franchising from developing - not because there was anything illegal about it, but simply because big business did not want to accept the challenge that this new concept presented! Seems to me that a lot of the same could be going on here.

How many of you are going to end up with sticky egg all over your faces if the courts find that the same thing has occurred here?

Last time that I looked, none of you was sitting on the Judge's right side whispering into an ear on what decision that he/she must render.

Get a life

Welcome troll. This should be interesting...

[Leftcoaster]

Now Mr M, play nice. He was this close to completing his downline when this whole thing broke. He's bound to be a little upset.

That said, it's amusing when they do pop out from under their bridges to demand their toll. Note to troll: the Three Billy Goats Gruff ain't got nuthin' on us!

[wserra]

It sure is interesting to see all the "experts" come crawling out of the woodwork when the Government steps in and shuts down a company

I'm sure it is. Tell us where you mean, why don't you? It's certainly not here. Perhaps you'll point out where anyone here has claimed to be an "expert". One exception: Tony ("fuelsaving"), who posts on the various miracle mileage-booster potions, really is, and has his C.V. on his site to prove it.

And, were you able to read, I'm sure you'd be interested to look down the list of ripoffs discussed to see how many of them appear here "when the Government steps in and shuts down a company". I think you'll find that it's limited to Ad Surf Daily, YTB and The Results Group. Moreover, twice in the last three years the board has blown up, and we lost hundreds (if not thousands) of posts. While I don't think ASD ever appeared before, YTB certainly did.

How many ongoing complaints are there in the courts involving GM, Ford, Drug Companies, Countrywide, Merrill Lynch, Apple, Microsoft - gee, I don't see the masses rising up over these?

Complaints for being pyramid schemes? None that I know of. Perhaps you could point some out.

Just what is a Ponzi scheme? What makes a program into a Pyramid?

Glad you asked. A pyramid is legally characterized by

the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users.

In Re Koscot Interplanetary, Inc., 86 F.T.C. 1106 (1975). Courts interpret the phrase "ultimate users" to mean people who are not distributors. See, for example, Webster v. Omnitrition International, Inc., 79 F.3d 776 (9th Cir. 1996). The rule of thumb is that 70% of sold products must be to ultimate users rather than distributors. If a particular business does not meet the 70% sales figure, the FTC (if they ever get around to it) presumes that the "business" is selling the opportunity rather than the product, and is thus a pyramid.

Put another way, Ponzi schemes have evolved with the development of the Internet, but their basic premise remains the same: later investors' funds are used to pay the earlier investors. A version of the Ponzi scheme that law enforcement officials have encountered in recent years is referred to as an "auto-surf program." "Auto-surf" claims to be a form of an online advertising program that generates revenue from so called "advertisers" who pay fees to have their websites displayed, or channeled to other viewers, through the "host's" web-based operation. As part of the program and to encourage more "advertisers" to pay the membership fee, the "host" pays the "advertisers" a so-called "rebate" for viewing fellow
"advertisers' " webpages. Moreover, the "host" encourages "advertisers" to recruit new
"advertisers" by paying existing "advertisers" a referral fee. In this Ponzi model, the "host"
generates most, if not all, of its funding from membership fees, and therefore must use money received from later "advertisers" to pay "rebates" and referral fees to earlier "advertisers." These programs collapse when new "advertisers" membership fees fail to cover the payouts promised to existing "advertisers."

Sound like anything we know? The government seems to think so.

Apart from this, what happened to the old principal of Justice and innocent until proven guilty?

I hate to break it to you, swordfish6, you being an expert and all, but they haven't been criminally charged with anything yet. That's where the "principal" of the presumption of innocence applies, you see.

Whassamatta? Got youw widdle panties in a bunch because you're not getting those early sign-up checks from ASD anymore? Poor baby. Get a job.

[wserra]

ASD has filed two motions in the pending forfeiture action: to dismiss and for emergency relief in releasing their funds. Both read as though they were written by a Christian Scientist with appendicitis.

First of all, ASD has filed a motion to release the seized funds, which Tulsa Today reports as having increased to a cool $93.5M. The only problem is that ASD is a corporation, and most of the funds, you see, were in individual accounts in the name of Thomas A. Bowdoin, Jr. To avoid the obvious standing problem - only an object's owner has standing to seek its release - Bowdoin claims that he "might" be the owner. You know, $10M here, $20M there, who can keep track?

Second, ASD pleads that, unless the govt releases the funds that it received from its "advertisers", it will go out of business because it won't be able to pay its "rebates" to its other "advertisers". Think about that one, folks. What is the allegation against ASD? That it's a pyramid, right? What is a pyramid? A "business" that pays earlier "customers" from funds received from later "customers". In stating that it will go out of business without its "rebate" money, ASD is agreeing that it isn't selling advertising, it's selling "rebates", and that its "rebates" come from later customers.

I don't see how indictments can be far behind.

[michaelwebsterlaw]

ASD is putting up an interesting legal fight, in my opinion.

Forget most of the technical legalities, the one good point that they have made is about how the Government was able to have evidence as to the majority of the intentions of the ASD participants.

I don't know where that goes, but it is not a bad point.

[wserra]

Well, ASD and Bowdoin have lost their bid to get the seized property returned. In her lengthy opinion issued yesterday, Judge Collyer (DC) found, in essence, that ASD was a ponzi scheme - not that it wasn't pretty clear all along. As Kickback says, pounding on a keyboard like a crazed bonobo isn't much of a business model.

Among the witnesses ASD called was one Gerald P. Nehra, a Michigan lawyer who holds himself out as an MLM expert and advisor to the MLM "industry" (his web site is mlmatty.com). Judge Collyer described his testimony in one of the most genteel euphemisms I've ever seen in an opinion - he "demonstrated the fallibilities of the professional expert witness". And, once again, her opinion demonstrates the legal importance of having more sales to customers than to distributors, something we have discussed here repeatedly and which few (if any) MLMs have.

I'd say that's the end of the line for ASD.

[Judge Roy Bean]

It's getting worse....the natives are restless and they're going after BofA in a RICO action:

http://www.courthousenews.com/2008/11/2 ... lleged.htm

"The RICO defendants devised, perpetrated and/or operated an illegal Internet-based marketing scheme that obtained tens of millions of dollars from plaintiff and class members throughout the United States who paid money to AdSurfDaily, AdSurfDaily Cash Generator, Golden Panda Ad Builder, and La Fuente Dinero (collectively referred to hereinafter as 'ASD') for so-called 'ad packages' that conferred members in ASD's program."

....

"An investigation by any disinterested financial institution would have set off alarm bells given: (1) the criminal history of both Bowdoin and Busby relating to investment fraud; (2) Bowdoin's history of multiple failed and questionable business ventures; and (3) the lack of legitimate business operations capable of generating tens of millions of dollars that were deposited in the RICO defendants' Bank of America accounts in a relatively brief period of time. At least one other financial institution has closed an account held by Bowdoin or a family member after its investigation revealed that Bowdoin appeared to be operating a Ponzi scheme. Also, Visa has often refused its cardholders' use of Visa cards to pay for ASD ad packages because Visa characterized these purchases as 'suspicious.' Similarly, the popular PayPal system could not be used to purchase ad packages from ASD."

Ouch. Just what BofA needs.

[wserra]

Some folks just are not the sharpest knives in the drawer. There's no other way to explain this.

If it looks like Ad Surf Daily, and sounds like Ad Surf Daily, and describes itself like Ad Surf Daily, then . . . it's Surf Ad Gate World! Can the FBI be far behind?

[wserra]

Thomas ("Andy") Bowdoin has been arrested on a DC indictment alleging mail and wire fraud. He appeared before a M-J in FLMD (he lives in Tampa), and was released on a bail package to appear in DC. I would link to the indictment but, since he hasn't been arraigned on it yet, it's still sealed. He had to sign over his two Florida homes to secure his appearance, and his wife and adult daughter had to sign the bond as well. I'll link to the indictment once he's arraigned.

Finally.